Blockchain – Much more than just Bitcoin Hype

Blockchain is changing the technology landscape in many industries – Finance, Health – anywhere that security is a major concern. Blockchain is about much more than bitcoins.

Blockchain technology offers much more than the current bitcoin hype might suggest. “Blockchain has matured into a core technology and will achieve a breakthrough in the finance sector this year. Blockchain-based applications can be used to solve problems that used to be extremely costly and time-consuming,” explains Marika Lulay, CEO of GFT Technologies SE (GFT). For banks, insurers and payment service providers, blockchain now provides solutions that were not possible with conventional technologies. One example is advanced invoicing: using a blockchain solution to deliver significant real-world cost savings and drastically reduce the risk of fraud.

GFT originally established a blockchain incubator in London in 2015 with its ‘Project Jupiter’. An architectural framework (the ‘Jupiter Sandbox Architecture’) is used from the conception to the development stage. Prototypes have already been implemented in Germany, Italy, Spain and the UK for various areas, such as lending, payment transactions, cross-border clearing and settlement. For example, an application developed in this way – based on ethereum – was created for the Royal Bank of Scotland. Flexible prototyping in the GFT incubator and GFT’s Digital Innovation Labs enables developers to quickly reject non-promising approaches and invest only in effective designs. GFT’s aim is to help its clients understand the numerous ways they can leverage distributed ledger technology (DLT) and establish their own viable business models.

Potential uses of distributed ledger technology (DLT)

Together with its partners in Italy, GFT is helping set up a secure, interoperable and cross-platform blockchain DLT network across Europe. There are three main application areas: reducing the risk of fraud in billing (finance industry), certifying products and classifying quality (pharmaceutical industry), and real-time reimbursements (transport industry). For the invoice settlement scenario, GFT has produced a proof-of-concept for advanced invoicing which simulates the traditional invoicing process using a blockchain DLT network, based on the R3’s Corda technology. The pilot will go into production in a few weeks’ time. Currently, if a company asks a bank for a loan equal to the value of an invoice they are expecting to have paid, it involves several risks and exposes the bank to fraud. For example, the same invoice could be presented to several banks as collateral. DLT helps mitigate this risk by integrating all invoices into a single, secure ledger which all banks can access and query at any time. In the new scenario, depending on the DLT response, the bank can decide to grant the loan or not. “This drastically reduces the underlying credit risks,” states Lulay.

There are numerous processes involved in international money transfers, trade transactions, securities trading and trade finance activities which are all still handled manually, which is both time-consuming and costly. “Blockchain enables us to automate and simplify these processes, thus making them more efficient,” says Lulay. By using smart contracts, for example, banks could optimise the current manual processes for the settlement of securities transactions, such as equities and bonds.

Richard Miller, Strategy Head – Disruptive Technology, GFT said “We are seeing tremendous interest from clients wishing to examine how distributed ledger technology can add value to their business. Clients are recognising that now is the time to utilise DLT and blockchain for non-mission-critical use cases that have the potential to be truly transformative.”

GFT Coin promotes employee recognition within GFT

In order to promote DLT, blockchain and cryptocurrencies amongst GFT’s own workforce, a GFT cryptocurrency named ‘GFT Coin’ was created as a pilot project in the UK in early 2018. The initiative is currently being rolled out across the GFT Group. Employees receive a number of coins every month and can ‘reward’ their colleagues with a GFT Coin as they see fit. For example, colleagues reward each other for giving a helping hand, writing a new external blog, or taking on additional tasks outside of their main area of work. The reason for the reward is specified in the transaction. Although the coins have no value (as yet), they are an ideal way to promote team spirit and foster a culture of healthy feedback within the company.

William Goddard

William Goddard is the founder and Chief Motivator at IT Chronicles. His passion for anything remotely associated with IT and the value it delivers to the business through people and technology is almost like a sickness. He gets it! And wants the world to understand the value of being a technology focused business in a technological world.